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Health Subsidy FAQ's

Frequently  Asked Questions (FAQs)


We have created this FAQs document to answer questions you might have about the changes to Sunoco's subsidy of the Sunoco, Inc. Retiree Medical Program and similar benefits provided under Sunoco's termination (severance) plans for non-retirees and retirees who are otherwise ineligible for retiree medical benefits. 


1.  Does Sunoco have the right to use the money in the Trust for anything other than Sunoco's subsidy of retiree  medicaand life insurance benefits  and related administrative expenses?


No. The Trust has been established according to a strict set of rules that do not allow the Company to use the funds for anything other than providing Sunoco's subsidy of retiree medical and life insurance benefits, plus any related administrative expenses. If funding remains in the Trust after all retiree medical benefits have been provided, the remaining assets of the Trust will be used to pay for Sunoco's provision of retiree life insurance benefits to eligible retirees who retired on or before

July 1, 2010.


2.  In 2012, Sunoco funded the Trust with approximately $200 million. At the time, while there was no      guarantee, the Company expected the funds in the Trust to last until 2020. Is that still the case       


     This answer was updated as of 11/1/2015.

Based on the current utilization of the Trust funds, and the investment returns generated by the money in the Trust, the Company does still expect the Trust to last until 2020. As always, the 2020 date is only an estimate, and should not be construed as a guarantee of the Trust's actual duration.


3.  Will my benefit from the Trust cover the entire cost of my coverage?


No. Sunoco currently subsidizes the cost of your retiree medical; it does not pay the full cost. You will continue to receive the same subsidy amount that you previously received.

    If you are eligible for subsidized retiree medical coverage until age 65, or Medicare eligibility (if earlier than age 65), the subsidy remains capped at $7,464 (maximum) per member per year (maximum of $14,928 per family).

    If you are eligible for subsidized retiree medical coverage after you turn 65 or become Medicare eligible, the subsidy remains capped at $2,064 (maximum) per member per year (maximum of $4,128) you are eligible for Medicare and your spouse/family member is not eligible for Medicare (or vice versa), the maximum is $9,528 per family.

    The creation and funding of the Trust does not extend your current eligibility (e.g., if today, you are only eligible for a subsidy until age 65 or Medicare eligibility, once that age is reached, you will not receive further subsidies from the Trust even if funding remains in the Trust).

The amount of the maximum subsidy has not changed; however, as the cost of coverage increases over time, the amount you pay toward the cost of coverage will increase as the gap between the subsidy and the cost of your coverage increases. This feature is in the current program design and did not change as a result of establishing the trust.


4.  What happens when there is no money left in the Trust?


Once the funds in the Trust have been exhausted, Sunoco does not intend to make additional payments to the Trust to continue the subsidy. It's important to note that the end of the subsidy does not necessarily mean your option to elect medicacoverage will end. It means that you will no longer receive a subsidy from Sunoco to help pay for that coverage.


5.  How do know that the assets are secure?


The use of the assets in the Trust is governed by a strict set of rules under both the Employee Retirement Income Security Act of 1974, as amended (ERISA), which is the federal law governing employee benefit plans, and the InternaRevenue Code. These rules require those who are responsible for investing the assets of the Trust to do so prudently, and do not allow any Trust funds to be used for anything other than permitted purposes, in this case paying Sunoco's subsidy of retiree medical and life insurance benefits and related administrative expenses. The Trust is a separate legal entity independent of Sunoco, Inc. and not subject to the claims of any creditors of Sunoco, Inc. Return on investment and preservation of capital are important components in determining how long the funds in the Trust will last. These goals will be the focus of the governing investment strategy.


6.  Who will make investment decisions? Will there be guidelines governing investment decisions?


The Energy Transfer Investment Committee develops the Investment policy to preserve capital that would govern Trust activities.


7.  Is Sunoco doing this to save money?

We are doing this to help Sunoco remain a viable and competitive company.  It reflects the reality of the Company operating in today's marketplace. Creating the Trust removes the long-term liability of providing subsidized retiree medical coverage from our balance sheet and strengthens the financial standing of the Company.


8.  How does the Trust work with the Affordable Care Act?


The Patient Protection and Affordable Care Act (the federal health care reform law) is expected to introduce more coverage options to the market and provide people with more choice in coverage. You may continue to elect a coverage option offered through the Sunoco, Inc. Retiree Medical Program or you may elect to move to another plan offered through a state or federal exchange, or a state- or federal-sponsored option (or otherwise) as you see fit. However, in order to continue to receive Sunoco's subsidy from the Trust, you must continue to select your coverage through one of the options offered through the Sunoco, Inc. Retiree Medical Program (or through one of Sunoco's termination (severance) plans).


9.   How does  the Trust work with Medicare?


The subsidized retiree medical benefit provided through the Trust will work exactly the same way as the benefit does today. The amount of the subsidy- a maximum of$2,064 per member-and the process  to receive your benefit  are not changing as long as there are funds in the Trust. Sunoco's subsidy can be used only to subsidize the cost of coverage provided through the

Sunoco, Inc. Retiree Medical Program.


10. Can I apply the subsidy to the cost of any coverage Iwant?


You are welcome to buy any coverage  you wish. However, Sunoco currently only subsidizes the cost of coverage available through the Sunoco, Inc. Retiree Medicai.Program (and similar benefits available through Sunoco's  termination  (severance) plans). Should you decide to purchase other coverage, you will not receive the subsidy.



11. Will my benefit still be paid monthly?


Yes. The billing and payment process is not changing.


12. Are spouses eligible to receive a benefit from the Trust?


Yes. A spouse who is eligible today will continue to be eligible under the terms of the plan. There is no change to how the benefit is provided to spouses or surviving  spouses; however, the subsidy will end when the funds in the Trust are exhausted.


13. How can I determine the funding level in the trust?


Every April, the trust is required to provide a Summary Annual Report (SAR) to all participants.


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